Last month saw George Osborne deliver the 2016 Budget, something he described as being for “the next generation”. Whilst it is great that the chancellor is looking ahead to the future, our customers want to know about right now. The Budget is always a controversial matter, but many are asking: “how does this affect my finances?”
If you are a small business owner, the answer is a positive one. But, if you are a contractor or in the buy-to-let industry, the news is not so great.
We have looked into the small print of the Budget, and have highlighted the policies that will make the biggest difference to investors, property owners, savers, and pensioners.
Capital gains tax has been cut from 28% to 20%.
The income tax threshold has also been increased from £10,600 to £11,500 – so that 1.3 million of the lowest paid are taken out of tax altogether.
Insurance Premium Tax will increase a little to pay for flood defences.
Fuel duties remain frozen, as does beer and cider duty.
Rates of stamp duty land tax for commercial property now falls in the lower bands, with a zero rate for properties valued under £150,000. But bad news for those in the buy-to-let industry. Contrary to a suggestion made in the Autumn Statement that those with more than 15 properties would be exempt, large-scale investors in buy-to-let properties will pay the chancellor’s three percentage point stamp duty surcharge from April.
Entrepreneurs & Contractors
Mr Osborne aimed his words at public sector organisations, stating that they had a duty to ensure all their staff – such as contractors – pay the correct rate of tax.
Corporation tax will be reduced to 17% by 2020.
Small businesses will be boosted in terms of business tax, as he claims that extra money collected from multinationals who have avoided UK tax would be spent of small businesses.
Business rates will be reformed so that 600,000 small businesses will fall below the threshold as of next April.
Osborne revealed a retirement savings vehicle called the Lifetime ISA. This tax-free ISA would have a savings limit of £20,000, with people under 40 receiving a government bonus for cashing into their Lifetime ISAs (£1 from the government for every £4 saved).
Enjay Debt Management care about your financial well-being. If you are facing any problems, please speak to our trusted advisors on our freephone 0800 612 7958 or use our contact page.